The autonomy rate of chips and sensors needs to be improved. In the process of accelerating the development of smart home industry, computer technology is the core, and sensitive devices and optoelectronics technology are the key and focus. China”s chip and sensor enterprises in the upstream perception layer of the smart home industry chain are weak in competitiveness, with less than 5% of the market share of chips for smart home and 70% of sensors being monopolized by foreign enterprises.
Smart home development trend
Smart home ecological platform will gradually unify from the bottom system: multi-device interconnection is the basis for realizing whole-house intelligence, and the current fragmented state among smart home brands also invariably greatly reduces consumers” consumption experience and limits the senseless linkage between devices, which seriously hinders the whole-house intelligence landing. Therefore, it is imperative to unify the protocols and standards among platforms and ecologies in order to achieve multi-device collaboration and make the consumer application experience seamlessly migrate and connect in multiple devices.
Smart home devices will further develop towards multimodal interaction: According to IDC FutureScape, by 2021, 24% of smart home devices will be equipped with visual or sensing interaction functions. The improvement of visual and sensing interaction technology will further catalyze the development of movable products in smart home devices.
Data privacy security will become an important issue: Unlike office, security, medical and other fields, the home scene is extremely private, but it is also the scene with the most terminals and most vulnerable to attacks, so the demand for data processing localization is gradually rising.
Smart home will develop from “intelligent general” to “customized service”: under the change system of technology-led consumption, it will be difficult to meet consumers” demand for intelligent, refined and personalized consumption with Internet-based smart single products. Precisely aiming at user needs, digging deeper into product quality, technology content, user matching and personalized services are the core competitiveness of smart home enterprises, and the overall development trend of the future smart home industry.
The cooperation between IT manufacturers and traditional home appliance manufacturers is deepening: the service experience and brand influence of home appliance manufacturers in the field of smart home are difficult to be reached by most IT manufacturers. On the one hand, in the era of intelligence, traditional home appliance manufacturers have started to transform; on the other hand, the interactive terminal is the focus of IT manufacturers, which is also the “weakness” of home appliance enterprises, so the cooperation between the two can closely connect home appliance devices and user interaction, so as to realize scenario-based intelligence.
Global Smart Home Market Status
In 2018, the top five countries in the global smart home industry market were the United States, China, Japan, Germany and the United Kingdom. Among them, the U.S. smart home market size was $18.87 billion, accounting for 49.5%; followed by China with a market size of $6.532 billion, accounting for 17.1%; while Japan, Germany and the UK accounted for less than 10%.
The smart home industry is competing to open globally, mainly concentrated in North America and Eurasia. In terms of global regional layout, as of 2018, there were 1,084 smart home companies worldwide, mainly in the United States, China, the United Kingdom, Japan, India, Germany, South Korea, Brazil, Australia and Russia. Among them, there are 628 in the United States, 103 in China, 88 in the UK, 52 in Japan, 51 in India, 46 in Germany, 38 in South Korea, 33 in Brazil, 24 in Australia and 21 in Russia.
From the global smart home segmentation product application structure, smart home appliances, home security and smart control performed well, ranking the top three segmentation applications. Among them, the market size of smart home appliances is $10.177 billion, accounting for 26.7%, followed by home security and smart control, with market shares of 21% and 17.6%, respectively.
In 2019, global consumer spending on smart home devices is up to $52 billion. Unfortunately, the world was hit by the epidemic in 2020, leading to a slowdown in smart home consumer spending. The latest report from Strategy Analytics, an authoritative research firm, points out that the global smart home market will decline from $52 billion to $44 billion in 2020 and resume growth again in 2021, reaching $62 billion in size, up 40.9% year-on-year. Overall, the global smart home devices market grows to $88 billion (RMB 610 billion) by 2025, growing at a CAGR of 15%.
China Smart Home Market
Artificial intelligence and IoT are landing in home scenarios, making home intelligence increasingly popular. North America, as one of the most mature markets in the world, has the highest smart home penetration rate, with more than 54% of U.S. households having at least one smart home device. China, as the fastest growing market, is pushing smart speakers, smart home appliances, smart door locks and other smart devices to show high growth, and various players are competing for the smart home market based on their own advantages.
On the whole, Xiaomi, Baidu, Ali and other technology manufacturers have become the first camp of domestic smart home. Xiaomi, as the first cell phone manufacturer to open up the smart home market in China, has built the world”s largest smart platform by cultivating a huge ecological chain, and its AIoT platform has connected 235 million smart devices, with 70.5 million monthly active users of the artificial intelligence assistant Xiao Ai, making it one of the winners in the domestic smart home market. Revenue from the smart hardware segment also showed high growth, with IoT consumer lifestyle revenue of 62.1 billion yuan in 2019, up 41.7% year-on-year. IoT consumer lifestyle revenue reached 13 billion yuan in the first quarter of 2020, which has become a bright spot for Xiaomi that cannot be ignored.
In late February 2021, IDC released the market statistics of smart home, in which the overall smart home market ranking in 2020, Xiaomi ranked first with 16.3% (Xiaomi smart home statistics include directly under Xiaomi, Xiaomi ecological smart home); Midea ranked second with 11.3%; Haier ranked third with 9.8%; other brands occupy the remaining 62.7% of the market share. It can be seen that, among the traditional enterprises, the active development of smart home belongs to Midea and Haier.
Haier is the world”s earliest home appliance company to the IoT transformation, the first to explore the smart home, set the global home appliance industry IoT transformation wind vane, with the scene ecology to lead the smart home scene revolution. From the smart home IoT ecological revenue of 4.8 billion yuan, an increase of 68% year-on-year.
Most traditional home appliance companies are slow to respond, for example, the United States in the smart home layout is a bit behind, although the establishment of the smart home division, launched the M-Smart open platform, but there is no mature systematized products for users to experience.
The other kitchen brands, or in a single smart or simple interconnection function, no independent APP system, and no central control of hardware devices, so they still face a long track to run for smart home.
Xiaomi”s smart home system is more complete, with the ecological chain brand advantage, covering smart speakers, smart gateway, smart switches, smart security, smart door locks and other fields, and cheap, the early stage to grab market share. Xiaomi is a typical Internet enterprise, in insight into the user, software experience, product design obviously has more advantages than traditional enterprises.
Lei Jun has said that Xiaomi is not a cell phone company, but an Internet technology company, and what Xiaomi wants to build is the whole smart home ecology. Obviously, Lei Jun has realized its trust for Xiaomi in 2020 when the smart home is developing rapidly. To be able to occupy 62.7% of the smart home market, it can be said that it is not simple.
Especially Xiaomi”s AIoT platform connected 235 million smart devices, into 2020, Xiaomi will continue to increase the code, around the “5G AIoT” this track will invest 50 billion yuan.
Although the smart home market has continued to grow on both the supply and demand side in recent years as consumer demand continues to improve and many giants join, China”s smart home industry shipments have seen negative growth in 2020. The report shows that China”s smart home device market shipped about 51.12 million units in the third quarter of 2020, down 2.5% year-on-year.
The decline in smart home market shipments in the third quarter was mainly due to the decline in shipments of smart speakers and home video entertainment devices, of which about 8.29 million units of smart speakers were shipped, down 14.7% year-on-year, and about 12.38 million units of home video entertainment devices were shipped, down 19.9% year-on-year. At the same time, the shortage of upstream components is also an important reason.
However, from the data analysis, the scale of China”s home market has been ranked among the global leaders, but the current home market is still in the pattern of the masters, single product intelligence scale is amazing, such as smart speakers, while the integrated, systemic home products are slightly thin. In terms of market penetration, China”s smart home market penetration rate of 4.9%, while the same period the United States smart home penetration rate is as high as 32%, the gap can not be said to be large.
The global smart home market scale is up to hundreds of billions of dollars, but China”s smart home market is relatively slow to start, with each brand and platform working on its own and lagging behind the mark. In terms of hardware, Chinese home furnishing enterprises have been competitive, but the experience service system still needs to be improved.
In fact, China”s home market is not only the problem of slow start and low penetration rate, but also the more fundamental problem of facing “silo bottleneck”. In addition, the problem of many smart home products with more concepts than cores is also very serious.
China smart home has experienced three stages.
1997-2008 is the Internet era, products and users belong to single point connection, lack of big data and due platform, products focus on security and intelligent control two fields.
2009-2012 belong to mobile internet era, smart touch, multi-platform connection, communication protocol hit mutual recognition, and database establishment, which laid the foundation for the high level development of smart home.
From 2013 to now, it has entered the Internet of Things era. With cloud platform, service host, interconnection of things, 5G technology, etc., smart home will usher in a new windfall.
In the future, under the data-centered ecology, smart home will develop from the “hardware fight” to the “platform fight”. The application of big data technology makes it possible for smart home to develop with data empowerment.
Under the new competitive ecology with data as the core resource, enterprises with smart home platform as the core have a huge market prospect and the first-mover advantage to seize the ecological chain. Once entering the market power stage, these enterprises will gain enough user quantity, experience data, customized services and user stickiness, and the higher barriers on the platform based on its platform ecological chain will make it impossible for the later to enter, copy and surpass. With the promotion of technologies such as big data and cloud computing, the competition for smart home platform will be the key for enterprises to obtain the core competition.
The smart home industry looks tempting, but the road to walk is quite difficult. Those who can succeed are either born strong or have lasting stamina.